Got suggestions for the National Export Initiative? We want them!
July 2, 2010Grace Hu is a Presidential Management Fellow with the Trade Promotion Coordinating Committee Secretariat.
Update (7/22/10): We truly appreciate all of the comments offered here, however, to ensure your comments and suggestions are considered, please submit them through the process detailed in the Federal Register notice.
Do you have ideas for improving government programs to make it easier to export? Have you encountered challenges in exporting? If so, we want to hear from you. The Administration is embarking on a five-year National Export Initiative (NEI) to double U.S. exports. As the Federal government puts together a plan for implementing the NEI, we are looking for your insights and input. That is why the Trade Promotion Coordinating Committee (TPCC) is soliciting comments from June 30 to July 26 through a Federal Register notice .
Specifically, we are interested in input from exporters, other private businesses, trade associations, academia, non-governmental organizations, and other interested parties regarding:
- identification of Federal government programs or regulations that impede the ability of U.S. companies to export;
- effective foreign trade promotion programs and activities that could inform U.S. Federal government program development;
- identification of the most (or least) effective Federal government programs that support U.S. exports, including specific experiences with such Federal government programs;
- steps that the Federal government could take to improve its programs to support U.S. exports; and
- more generally, how the Federal government could better help U.S. businesses export.
Your input will help the TPCC agencies develop the NEI plan called for by the President in Executive Order 13534. If you are an exporter, business interested in exporting, or care about helping double exports over the next five years, please take a few minutes before the July 26, 2010 deadline to submit comments in response to the NEI Federal Register notice. We’re waiting to hear from you, and thank you in advance for your help.
About the Trade Promotion Coordinating Committee
The TPCC is an interagency committee that coordinates the development of U.S. Government trade promotion policies and programs. The TPCC is composed of representatives from 20 Federal agencies and chaired by the Secretary of Commerce. Other agencies and offices represented include the Export-Import Bank, the Overseas Private Investment Corporation, the U.S. Trade and Development Agency, the Small Business Administration, the Departments of Agriculture, State, Defense, Energy, Homeland Security, Interior, Labor, Transportation and the Treasury, the Office of the U.S. Trade Representative, the U.S. Agency for International Development, the U.S. Environmental Protection Agency, the Office of Management and Budget, the National Security Council, the National Economic Council, and the Council of Economic Advisors.
Exports are heavily dependent on some kind of protection of their intellectual property rights and there is no existing program to help them mitigate their risk in this regard. OPIC has been working on an Intellectual Property protection program for quite some time but, of course, they normally do not support exports because that’s EXIM’s business and yet they have the knowledge and the inclination to try to do something to help. They need authority to develop a product for exports as well as for investments. Such protection would make an immense difference in encouraging exporters to engage with emerging markets.
I would like to see more outreach to academia in response to the Roth decision. There is very little out there to assist our nations institutes of higher learning and research universities in crafting Export Compliance Management Programs. EVERYTHING is focused on industry. The main focus should be on deemed exports and travel… but there are some times when universities ship physical goods (such as plasmids or engineering samples). These are NOT sales of goods… I have yet to find anything about paperwork for these shipments and whether or not they require any type of invoice (so I’ve been “playing it safe” by creating a type of invoice to send with shipments).
The Connecticut Export Assistance Center is co-sponsoring a “Deemed Exports” conference/seminar 5-6 October.
http://www.buyusa.gov/connecticut/deemedexports.html
Presentaions will include Universities and Research. One of our speakers is from Yale. We are targeting educational insitutions and research facilities.
Anne S Evans
District Director
US Department of Commerce
International Trade Administration
Thank you, Ms. Evans, for your reply! Unfortunately, the university I work at (like most public universities) has very strict travel policies so only Director level and above actually travel for seminars and conferences, with very few exceptions. (In other words, people dramatically removed from the day-to-day operations). Webinars and conference calls is about all I’m permitted to attend – along with local events. My director is a member of NCURA and our VP is a member of COGR. They are both very good with passing information down the ladder to those of us with direct involvement, but it’s not the same.
Thank you again for your reply!
why not just lend money to people who want to export american products. like the chinese do. for exemple i have identified many american products that sells really good in countries where there are housing boom. like door, tiles,american made door locks. A lot of things of that of that nature are in demand around the world. My familly made a fortune selling construction supply in the sub-sahara and most of the products comes from china. for the most part the products are garbage because the materials break easily no quality. But i noticed that most american made good do last longer. the only probleme most customers want them but they dont event have essy access to the products. I alwayz wanted to export american made products but dont have the funds, what should i do.
Ikonics is a small ($20 million in sales) public corporation with about a third of our sales being export. We could substantially improve our export sales if the U.S. government took the following actions:
1. Negotiated reasonable tariffs in countries such as India where our products are capriciously miss-classified by Indian officials into a higher tariff rate. Our non-U.S. competitors deal with this by under invoicing, which is a violation of U.S. law.
2. Expanded free trade agreements. We are losing ground to our EU competitors.
3. Favorable tax treatment for exports, reflecting that margins on exported products are usually much lower than sales in the domestic market.
4. A weaker dollar.
5. Representing American interests on REACH (EU regulations on importation of chemicals) and other such regulations that have the intended or unintended result of fencing out American products, particularly for small companies.
Bill, I encourage you and others to submit your comments through one of the methods listed in the Federal Register notice, which can be found at http://edocket.access.gpo.gov/2010/2010-15934.htm . We genuinely appreciate and encourage comments and suggestions here on our blog, but submitting your comments through the methods outlined in the Federal Register notice is the only way to ensure consideration of your input.
Mr. Ulland –
You should report under-invoicing activity to the Export Enforcement Office. As you stated, this is a violation of our export laws. EEO gets most of their intel from competitors or former employees. I’ve had many sales reps and their customers come to me to ask me to under-invoice and I’ve always responded with citing the regulations. If the customer is intent on paying fewer duties and taxes, they need to address that with their own government. I’ve noticed that China is famous for mis-classification for the benefit of higher duties/taxes.
I agree with your 5 points above.
1) Identify potential prospects in the target market and invite them by paying for their travel expenses to come and visit the manufacturers in a small tradeshow type of environment through the local Chamber of Commerce or other.
2) Recommend to small and medium size manufacturers who do not have the human or financial resources, export knowledge or experience to sell their products through export management companies, like XL Group. The US Chamber of Commerce’s Export Assistance Centers are reluctant to recommend any-one such company as they do not want to promote one company over another. The result is that no-one is being recommended and the manufacturer does not export.
The US government offers precious little support to exporters, certainly the small and medium-size exporters. Most of the attention and support goes to exporters of agricultural products, military goods, and Boeing airplanes.
One enormously important part of exporting US orgin products is granting credit terms to overseas purchasers. Our European and Asian competitors are able to pass on the credit risk for term payments to government sponsored third parties so the manufacturers can concentrate on what they do best, manufacture machinery and goods. US exporters are required to sell only on payment in advance terms or assume the credit risk themselves, and many medium sized companies simply do not have the staff or expertise to evaluate credit risk in foreign countries. Therefore, thousands of US companies who could export, simply do not even try, because their profit margins are not large enough to absorb the possibility of non-payment and the problems of collection in a foreign country. I know ExIM Bank has a program, but it really doesn’t work for medium and small companies. Besides being very bureaucratic and slow, it usually will not grant coverage in countries where credit insurance is most needed.
Hi, I’m the Chair, Counseling and Membership for the Southern California Regional District Export Council.
I have a few suggestions:
1. Fill the empty positions for trade specialists! We have to have someone to assist us in country. I hear there are 80 positions vacant right now.
2. Support export education. Here in California we used to have 14 Centers for International Trade Development. We now have only 4 perhaps.
3. Encourage high school students to pursue export-related careers and to learn a second language!
There is a wide range of suggestions presented. Let me add a new one that I think is critical – Specifically the rapid expansion of foreign business travel to the US, and particarily, to US domesitic exhibits.
This is a major global paradigm shift that has been ignored by Commerce in terms of the needs of SMEs to recognize and benefit from this opportunity. Now SMEs do not have to go overseas to seek a representative or distributor – candidates are flooding American exhibitions at their own expense seeking to represent US manufactures.
In way of background first:
Commerce has never developed training or prepared instructions on how SMEs should prepare for, and service foreign attendees at IBP shows. Although Trade Specialists assigned to serve in an IBP show improvised in each show, and some ideas were very good.
Based on this, I wrote, obtained and co-managed a Commerce MDCP Grant to the State of California & EMA of SC in the late 1990s to determine if SMEs exhibiting in 15 IBP shows could influence the number and quality of export leads received. The grant was based on my doctoral dissertation on this topic.
The MDCP study results were positive – they could.
Additionally we found that the 250 plus participating companies didn’t have a clue on what the training should include. This is understandable since only 1 study had ever been conducted on this topic.
Given the fact that Commerce has never prepared any instructions on how SMEs should prepare for IBP shows, I would think they should have welcomed the findings. But zero interest.
I wrote a 300 page manual titled “PowerExporting” and offered it to Commerce in any form they wanted – training, licensing, having copies in the USEACs, webinars, etc. Even to include the topic and my findings in the planned update of the ‘Basic Guide to Exporting’.
The Problem and/or Area for Improvement:
Commerce didn’t have any training money, but more important, they didn’t see a need for change to the IBP’s delivery system (training of Trade Specialists) or the IBP program itself.
This is critally important since Commerce is missing opportunities to stay at the cutting edge of SME support.
I have continued conducting research at several IBPs annually, including surveying exhibitors, talking to show organizers, vendors on the new ‘smart booths’ etc. And its amazing – nobody recognizes that a program that was introduced before the internet and company web sites needs adjustment to reflect changes that occurred over the last 35 years.
I have one Key Question for both SMEs and Commerce officials:
If an SME knows who is coming months before the show, has their names, titles, company info and data, and knows what they want to accomplish, why can’t the SME communicate with the key prospects and initiate negotiatins before the show begins?
________________________
Closing comment: A four page brochure addressing “domestic trade show exporting”(C) is available without cost at http://www.Tradeshowsusa@msn.com.
I think it is important to focus the NEI on a country by country approach. There are probably no more than 8-10 countries that can contribute 90% of the $1 trillion increase in exports sought by the Obama administration.
One country where my colleagues and I can help is India. Many American companies are focused on China only and are ignoring India and the huge opportuniteis it offers in virtually every sector. The United States is viewed more positively in India than in almost any other major country (according to the Pew Center and to Ipsos market studies).
We think American companies can add $70 billion a year in exports to India by 2015.
Gunjan Bagla
http://www.theindiaexpert.com
Author Doing Business in 21st Century India.
Amritt Inc.
American companies are sometimes forced to take a loss on sales to India because of excessive duty/tax rates in that country. (Read Mr. Ulland’s post above). Further, officials within India continually try to re-classify products in order to collect more duties and taxes, which delays clearance and delivery to customer – and for whatever reason, Indian customers blame the U.S. exporter for this and not their own government. Were it not for these issues, more U.S. manufacturers would be thrilled to do more business in India.
would like to export the illegal immigrants that are constantly sneaking over the border,. these illegal immigrants and their kids cost american taxpayers huge amounts of tax dollars every year. their kids cost us $25,000 a year per child in education costs alone, not counting the medical and welfare costs to raise them.
we need to export illegal immigrants back to their native lands. america is overwhelmed. the american taxpayers and his kids are being completely negatively impacted by the wage busting and the taknig of american jobs by these lawbreakers. they are breaking our laws. legal immigrants go through years to enter legally and these people are only interested in their own welfare, and want to cut everybodyelse into pieces.
I think we should stop importing and only export. We then make money and we buy from ourselves!
Are you serious?
Nothing could be more ridiculous than this. How can you expect yourself to be just exporting and stop importing. Trade knows no barriers…..
The confusing maze of regulations and the difficulty of obtaining information on export controls certainly deters many of our SMEs from exporting. Exporters who suspect that there products or service may require an export license find themselves bounced around between the State Department’s DDTC, the Department of Commerce’s Bureau of Industry and Security and Treasury’s OFAC. None of their websites are very user friendly and I suspect that in the majority of cases no licenses will be required. I suggest that some resources be devoted to developing a single very user-friendly website with relatively simple online questionnaires that ask the potential exporter to describe, in increasing levels of detail his product, the country (and possibly persons)to which he wishes to export. Then either provide the answer of whether a license is required and how to apply for one, (capturing the information already entered online) or direct the exporter to an authoritative person who can access the information already entered and give reliable guidance. Once implemented, seek continual user feedback to refine the process. This is how private sector service providers deal with their clients. The current online information system does not work and a technical fix is well within the capabilities of ICT technology.
Hi Geoff,
My comment appears just below yours. I fully agree with your point about U.S. export controls. That is why our Center tried to fill some of the void by creating a new Web portal for international trade regulations, particularly U.S. export and import controls (www.tradecomplianceinstitute.org). Please look at the Regulatory Database and Regulatory FAQ database on the site. They do not go as far as you recommend, but it’s the best we could do with a grant from the U.S. Department of Education.
Maurice Kogon
Director, El Camino College Center for International Trade governm,ent
The U.S. faces an urgent need to stimulate manufacturing and exports to create more jobs. Although the NEI aims to double U.S. exports in 5 years to create 2 million new jobs, that ambitious goal is likely unattainable with the strategy proposed. Too much will depend on factors not fully within our control, such as how soon world demand for U.S. exports will recover; whether key countries will lower the trade barriers that most impede U.S. exports; and whether exchange rates will remain favorable (none a certainty). The two factors that we can control — interagency agreement to simplify and relax U.S. export controls, and more effective coordination and promotion of U.S. exports — are not easy either. As to export promotion, the NEI continues a short-sighted focus on the “low-hanging fruit” (export-ready firms), instead of also pursuing a “fertilize the tree” focus on the far larger group of potential new exporters (NTE). The export-ready focus, initiated in the 1991 US&FCS Strategic Review, was necessitated by resource constraints – i.e., just help those who could most immediately benefit. Federal resources are still constrained, but the NEI fails to recognize the far greater capacity of non-federal organizations to help fill the NTE void. U.S. exports will not achieve their full potential, unless we can increase our ratio of exports-to-GDP to the 20% or more level of our major competitors. That will happen only if we substantially increase the export base, which requires going well beyond the low hanging fruit. My lengthy White Paper submitted to Regulations.gov proposes a more robust, systematic and coordinated partnering with non-federal trade assistance organizations, not just another lip-service MOU with the usual platitudes. The non-federal partners would work to make more NTEs export-ready (fertilize the tree and increase the base), leaving the TPCC agencies to continue to focus on existing and newly export-ready firms. This would substantially increase exports from the NTE sector that have so far eluded prior NEI-type initiatives. The White Paper further identifies needs of NTE and export ready firms at each stage of their export development, the continuum of services that can best meet these needs, and how these services can be delivered seamlessly in a truly collaborative process.
The Ex-Im bank has been a key driver in increased exports for my company. Insuring A/R at a competitive rate has allowed us to extend terms and gain customers in countries where we otherwise would not have been able to do business.
Brazil has been identified as one of the United States’ leading trade partners. Reduced tariffs would help increase US exports into what is currently the most economically powerful country in South America.
I am the department chair of International Business at Austin College. We work closely with the local Export Assistance Center to develop programs on international business that serve the local business community.
We are currently “pushing” the NEI as a reason why students should major in International Business and have developed several posters with Obama talking about NEI to spur interest. The challenge we see is how to get the word out to local high schools, etc.
We also promote the Certified Global Business Professional and Export Management Professional certifications with prep courses for local businesses. But we run into the same challenge — getting the word out.
The DOC could really help us by developing handout materials with facts/stats on the types of career paths one can follow in international business, what those “2 million new jobs” entail and how to prepare for them. or statistics on the importance of US exports to reduce our trade deficit.
We often lead trade missions for small companies beginning the export process and have used CIBER or BIE grants to help fund these companies export expansion program. But we need more exposure or Whitehouse/DOC recognition to improve credibility and value to such programs.
We intend on offering “Doing business in xx” seminars focusing on the NEI objective. The obvious offerings are China and India, but courses on the Middle East/Africa, South America, Mexico, Eastern Europe/Russia are planned. The challenge is finding expert speakers on the regions and being able to anchor the seminar with practical steps to start the process. Most small business companies have to overcome their fear of exporting. Leading them by the hand, showing them the steps, and how to avoid the pitfalls is the challenge.
The Federal government could better help US businesses, particularly SMEs, to export by providing specialist assistance in the uses and operational processes employed in export documentary Letters of Credit (LC).
Documentary LCs are an undertaking, usually on the part of a bank at the request of one of the bank’s customers, to pay a named beneficiary a specified amount of money (or to deliver an item of value) if the beneficiary presents documents in accordance with the terms and conditions specified in the LC. LCs are a scalable, highly customizable business tool for risk mitigation. They shift the exporter’s payment-risk exposure from the importer to the issuing bank. By replacing importer-risk with issuing bank-risk, exporters become more comfortable that they will receive payment and are therefore more open to trading internationally. They can further shift the payment-risk exposure to their local bank by having the LC confirmed by their local bank. The documents presented under the LC are the documents required in customs clearance and taking possession of the goods (e.g. commercial invoice, bill of lading, packing list, certificate of origin, etc.).
The inclusion of Certified Documentary Credit Specialists (CDCS) as part of the NEI team would allow exporters to access knowledgeable LC practitioners who can provide guidance with understanding the rules-of-practice (UCP 600) and the impact of Incoterms on the documentary requirements contained within the LC. The CDCS’ knowledge will increase the SME’s understanding. Once SMEs recognize the benefits of using export documentary LCs and the operational processes used to comply with export LC terms, their increased confidence of receiving payment will encourage them to increase exports as a percentage of their sales.
Thomas Hrubecky, CDCS
Certified Documentary Credit Specialist
Lori Wallach discusses Obama’s National Export Initiative on PBS
http://citizen.typepad.com/eyesontrade/2010/06/lori-wallach-discusses-obamas-national-export-initiative-on-pbs.html
Even though US law says USTR can defend tobacco in cases of discrimination, USTR has not. Tobacco, which is an export based commodity, is being killed in the international market because USTR does not stand up for tobacco in clear cases of discrimination in international markets.
Tobacco is North Carolina agriculture’s main export crop, a crop that produces $200,000 of revenue for government coffers for every acre grown. Tobacco is getting hammered in the international market. Do the feds really want to increase exports? Ask USTR to do its job.
Tobacco kills people.
Just like the US pushed Colombia to grow flowers and other crops instead of poppy plants, North Carolina should find another crop to replace tobacco.
We should be (a) putting people to work and (b) giving our rivers renewed capacity/reliability by construction of new 1,200-foot locks at the 7 locations along the Mississippi and Illinois Rivers that were authorized by the Water Resources Development Act 2007. This would especially help our agriculture exports (while the inaction has led to our forfeiting our leadership to Argentina and Brazil) coming from the Midwest, but would also assist the many other commodities – the underpinnings of our economy – moved to, from and within our Midwest region. New locks along the southernmost portion of the Upper Miss System would help attract opportunities from the Panama Canal expansion as well as the future container-on-barge potential. The building trades would be put to work with construction of these new locks, built to tackle capacity constraints from a river transportation system that hasn’t seen much capital investment since its inception in the 1930s/40s. Seems like river transportation fits all of the criteria listed by this initiative. The Administration needs to support the Navigation-Ecosystem Sustainability Program (NESP) of the Corps of Engineers’ Civil Works program.
I am Managing Director of the Export Institute of the United States. Our Institute has been assisting and educating U. S. exporter since 1964.
We have launched a comprehensive online program to help U. S. exporters reach or exceed the NEI goals of doubling our nation’s exports in five years. Our vehicle to achieve these goals is our Online Certificate Program in Export Management which is recommended by the National Association of Manufacturers (NAM).
We would like to work with the NEI to make these courses available at a reasonable cost to small/medium sizes companies and individuals who want to start their own profitable export businesses – and need immediate training in the practicalities of exporting.
Will the NEI program provide a space where smaller organizations such as ours can make our educational services available to those participating in the NEI?
Respectully,
John R. Jagoe
Cut the red tape and allow to trade more with the likes of china for example
Thanks. I agree with Jone Bone. China is a great upcoming market and always heavily involved with US businesses. I saw a discussion the other day where Chinese experts fear that the fall of the US economy after downscale from S&P will result in domino effects in China
Rice is one of the best trading product to export.The price is high but the demand is much in demand.
Fight fire with fire. In this rapidly changing world no country is immune from learning how “the new kid on the block” is achieving a better export program.